About 40,000 More CT Workers Will Be Eligible For Overtime

Retail managers, insurance underwriters and others will no longer be salaried as overtime rules change

Manager jobs at retailers pay decent money if you judge it by the annual salary.

Richard Hayber, who leads Hartford's Hayber Law Firm, has filed class-action lawsuits against firms such as Family Dollar, GNC, Ocean State Job Lot and Save-A-Lot, and he said in Connecticut, these kinds of jobs tend to pay in the $40,000 to $50,000 range.

At about $45,000 annually, that would be $21 an hour if you worked 40 hours a week. But, because millions of these assistant managers, department heads and even store managers work 50, 60, even 70 hours a week, it gets less and less attractive.

"I've had people working 70 or 80 hours a week," Hayber said. "That's an awful lot of work for no extra pay."

Now, the U.S. Department of Labor will make all salaried workers — supervisory or not — who earn less than $50,440 a year eligible for overtime. The change will take effect in 2016 and does not require Congressional approval. In Connecticut, the department estimated, 40,000 workers will become eligible for overtime who are now exempt.

Republican presidential candidate Jeb Bush earned $7.4 million in 2013 and has paid an average federal income tax rate of 36 percent over the past three decades, according to tax returns released by his campaign on Tuesday.

Bush disclosed the returns on a website that outlines his work history...

Republican presidential candidate Jeb Bush earned $7.4 million in 2013 and has paid an average federal income tax rate of 36 percent over the past three decades, according to tax returns released by his campaign on Tuesday.

Bush disclosed the returns on a website that outlines his work history...

(Tribune wire reports)

Before the change, Hayber's firm had to argue that the managers spend most of their time stocking shelves or ringing up customers, not making schedules or giving orders. That's because the old threshold where overtime was automatically granted in Connecticut was $24,700.

Daniel Schwartz, a labor law partner at Shipman & Goodwin, represents employers. He said, "There are plenty of assistant managers out there who are managers in name only."

He said with the threshold change, complying with wage and hour laws will be easier for companies.

"If someone's making $30,000 or $35,000 a year, you won't have to worry about the duties test," he said.

Lobbying groups for retailers, however, have been loudly protesting the change. They argue that managers want to be salaried for the benefits and because they can earn bonuses, and if they are shifted back to hourly jobs, they won't make any more money after overtime, because the companies will make sure their total pay stays the same.

Hayber said that after some of his victories, the companies reclassified the workers and determined the pay by dividing the weekly salary by 40. Then those companies bar the workers from working overtime — which means more people get hired.

Scott Macdonald, a consultant at the Human Resource Consortium in New Haven, said, "All of the dire predictions that are made by groups that typically represent businesses generally don't come to pass."

And, he said, an employer can still give bonuses to hourly workers.

It's not only low-level managers who will benefit. "In fact, we're resolving a case right now against a major property-casualty insurer," Hayber said, with a class of workers who earn salaries in the $40,000s. About 700 workers will share several million dollars in back wages, he said.

Hayber also recently won a case against Chubb Insurance. A man who worked as an underwriter in Simsbury, earning $45,000 a year, should not have been considered exempt from overtime rules, the federal judge ruled May 15. The man received more than $18,000 in back pay.

Schwartz said the change will probably not cause businesses to pay hundreds of millions in overtime, as the National Retail Federation warned. "There's nothing preventing employers from saying: 'Look, you're not allowed to work overtime,'" he said.